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The best choice is an informed choice. Make sure you know what goes for what when it comes to marriage and your money

It’s the month of love and the season for romantic proposals of marriage. Before you kneel down and whip out that whopping diamond ring, though, stop to consider the type of marital contract into which you will be entering. There are three possible arrangements that all have different financial implications for you and your spouse.

The three different marital contracts are: in community of property (COP); an antenuptial contract (ANC); and, at the far end of the spectrum, an antenuptial contract with accrual (ANC with accrual).

In community of property

If you don’t have an antenuptial contract drawn up before your wedding, then your marriage is in COP by default. You and your spouse will have 50/50 shares in everything you own, including external assets, such as businesses, you may have owned before the marriage. This means that if you should get divorced, your spouse will be entitled to half of your assets, including those you owned when you were single. The catch is that you also share all debt. So, if your spouse racks up huge debts that he or she cannot pay, the creditors would be completely within their rights to attach your assets to serve as compensation.

Another drawback is that if one of you dies, both your bank accounts fall under the deceased estate and, thus, both bank accounts will be frozen. To get around this, you have to get the deceased’s will lodged with the Master of the High Court. Once the will has been lodged, the nominated and authorised executor has the authority
to get the bank to unfreeze the surviving spouse’s bank account.

Antenuptial contract

If you already have significant assets to your name, such as property or business, this is a good option. All assets you owned before the marriage, as well as assets you build up after the marriage, remain your own and will not be split in the event of a divorce. Bequests and inheritances are automatically excluded. This contract protects you from bearing the consequences of your spouse’s poor financial discipline, because his or her creditors will not be able to attach your assets to cover their losses.

ANC with accrual

With this regime, you maintain separate ownership of all your premarital assets, but the growth in all assets you acquired during the marriage is shared on divorce or death. The spouse with the smaller accrual of assets has a claim against the spouse with the bigger accrual of assets at divorce or against their estate if he or she dies. Typically, this type of marriage protects a spouse who has opted to stay at home to look after the children. And, as with the antenuptial contract, you don’t share each other’s debt, so your debt won’t become their problem.

Living together

If, like many modern couples, you have chosen to forgo the wedding drama and simply live together, you should still have a written agreement drawn up covering your legal obligations and any property ownership. This agreement ensures that each partner is fully aware of their legal obligations and prevents complications should you separate.